
29 March 2007
Large marginal plant can be an advantage but it can also effect markets quite significantly.
In the 1990's the pool system of pricing relied heavily on the marginal unit. This unit set the pool price for all the other generators for that half hour. Complex algorithms were devised for calculating which unit was the marginal unit and then a large computer would run "Goal" the NGC programme for assessing marginal plant. More often that not, Drax would be the marginal setting plant, with 6 630MW units and with NGC looking for 2GW of additional margin, if Drax was on it would be priced at the margin and if it was not then quite frankly most other operational plant was needed. Due to the size of Drax its importance was exemplified. When the pool system was replaced with Neta the need for large big machines became less and smaller fleet of foot machines were the order of the day. Flexibility would be rewarded.
Langeled could during low Summer demand periods produce as much as 25% of the UK's daily gas demands. It is clearly hugely influential on gas prices and therefore power prices. Not surprisingly the market is still a little jittery when we see Langeled struggle to find its feet, and continue to flex in terms of volume.
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Feeling the Squeeze
 
13 May 2008
Centrica will not repeat last year’s exceptional level of profitability their Chief Executive warned yesterday. But with rising energy prices it’s interesting to understand how they’re not cashing in.  
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Energy Forward Prices continue to gain ground
 
10 June 2011
Despite market participants describing the market as stagnant and directionless, energy forward prices continue to gain ground. Winter 11 power closed the week up at £59.65/MWh while NBP Winter 11 gas finished at 72.20p/therm.  
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Downward Trend Still in Play
 
13 May 2011
Most contracts in the UK energy markets continued to lose ground this week enforcing the downward trend that has been in play since the start of the month. The Winter 11 contracts closed the week at £57.60MW/h and 68.85p/therm.  
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Winter 11 - A Slippery Slope
 
06 May 2011
While March was a month of shocks and gains, April seems to have marked the start of a downward trend in the UK power market. The WInter 11 contract is just one example.  
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The Market in April 2011
 
28 April 2011
In comparison to the activity seen in March – the energy markets seemed relatively sedate shedding some of the value along the way.  
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What's in the Mix?
 
24 September 2010
While gains may have been seen in both the power and gas markets this week – the gains were not equal causing a big shift in the generation mix  
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Unseasonal Temperatures help to melt prices
 
16 November 2009
Middle of November but no sign of wintery temperatures. The effect was to soften the prompt power market, which also felt the pressure from weak commodity curves. The downward trend fed through the power curve.  
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What's Happening in the Back-End?
 
19 June 2009
The back end of the curve is extremely difficult to trade. Those dipping their toe in tend to be Producers (with excessive length adjusting their risk positions) and Banks looking for some exposure. At the same time Retailers tend to be short-termist.  
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Feeling the Squeeze
 
13 May 2008
Centrica will not repeat last year’s exceptional level of profitability their Chief Executive warned yesterday. But with rising energy prices it’s interesting to understand how they’re not cashing in.  
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Short-term worries, sorted.
 
16 October 2007
Gas supply increases at the same time that two nuclear units return. Prompt price may well return below £30 and the sell off could be short and quick. Oil pries continue to worry.  
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